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In order to reduce their debt, the Johnsons sold some real estate property valued at $165,000 for $143,000. They paid off a loan balance of $100,000 and put the rest in savings. Which of the following is a true statement?

a.
The Johnsons increased their liabilities.
b.
The Johnsons increased their liquid assets.
c.
The Johnsons increased their net worth.
d.
The Johnsons increased their use assets.

2 Answers

7 votes

Answer:

The answer is B

Explanation:

I just took the test and got 100%

User Porg
by
7.8k points
2 votes
The question is giving us the following scenario: "In order to reduce their debt, the Johnsons sold some real estate property valued at $165,000 for $143,000. They paid off a loan balance of $100,000 and put the rest in savings." We can see that they actually lost money - they got for the house less than the house is worth - they decreased their net value. But they have more cash that they can use (the savings) - this is called liquid assets - so the correct answer is b The Johnsons increased their liquid assets.
User Mark Sivill
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8.5k points
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